A rare source of bipartisanship has erupted in state capitals across the country: addressing data centers.
Lawmakers from both major parties in red, blue and battleground states are racing to figure out how to regulate the construction and energy consumption of the data centers that fuel the AI boom.
This year alone, state lawmakers have proposed more than 300 bills designed to address the emerging challenges presented by data centers, according to Multistate, a state and local government relations firm that tracks state legislation across the country.
The flurry of activity comes as voters express caution about technology that industry leaders say will transform the American workforce, as well as long-standing concerns about high costs.
The proposals cover several categories. Some lawmakers have sought to implement moratoriums on data center construction, blaming their emergence as a major driver of rising utility costs for communities. Many of those pushing for moratoriums say they are a tool to buy time to study and better understand their impact on communities.
Other state lawmakers have attempted to establish requirements that impose restrictions or reporting requirements on the amount of electricity and water such centers need to operate. And others have proposed cutting tax incentives that were initially intended to attract new construction downtown.
For now, most proposals from both Democrats and Republicans have taken advantage of rising utility costs by framing the issue as one of affordability, particularly ahead of this fall’s midterm elections. And the debate has not followed typical partisan lines.
“There just aren’t many issues today that you can’t predict what a state is going to do based on its partisan makeup,” said Morgan Scarboro, vice president and economist at MultiState who leads teams monitoring data center legislation. “It’s been really interesting to see this play out in a way that doesn’t make sense from a partisan standpoint.”
“Perception among legislators and the general public varies widely, from state to state, even from locality to locality, and the legislation reflects that,” he said.
In part, this has been a product of the fact that state lawmakers “are definitely playing from behind” on the issue of data center construction, given the impressive speed with which the rise of artificial intelligence has occurred, added Daniel King, a researcher specializing in AI and data centers at the Foundation for American Innovation, a technology policy think tank.
“That’s not to say that now that the issue is center stage, they should take tougher action, but there certainly has been a lag in how quickly the technology has moved and how and when state lawmakers have decided to react,” he said.
It’s an issue that has also connected opposing political poles nationally, such as Sen. Bernie Sanders, I-Vt., who has called for a national moratorium, and Florida Republican Gov. Ron DeSantis, who has warned of significant job displacement for white-collar workers due to the rise of AI.
A new NBC News poll helps underscore the uncertain political terrain facing politicians at the state and national level on this issue. The poll found that a majority of voters nationwide said the risks of AI outweigh the benefits, while a plurality viewed AI negatively and said they don’t think either party is doing a good job handling the technology.
For some lawmakers, that has translated into proposing temporary moratoriums on building new data centers. Democratic lawmakers in New York, Maine and Vermont, Republican lawmakers in Oklahoma and lawmakers from both parties in Georgia have proposed temporary moratorium bills that would also require studies of the environmental and energy effects of data centers in their states. In Georgia, Republicans have also proposed bills aimed at limiting increases in utility bills.
Meanwhile, many states that already have a large data center presence are now considering legislation that aims to curb further development. In Virginia, which has the largest number of data centers in the United States, state senators from both parties have supported a proposal in the chamber that would end about $1.6 billion in annual tax breaks in the state for companies that build data centers. Democrats in Arizona, Michigan and Maryland have proposed similar legislation. And Republicans in Georgia, which is also among the states with the highest number of data centers, introduced a bill this week to end tax incentives for the development of new data centers.
Florida Republicans, backed by DeSantis, have proposed bills that effectively increase data center regulations.
In South Dakota, Republican lawmakers have pushed a so-called Data Center Bill of Rights that would effectively eliminate state tax breaks for data center operators and require them to pay most electricity and water costs.
Meanwhile, Democrats in Washington and Colorado have proposed laws designed to prevent the perceived environmental impacts of data centers. Washington lawmakers were among many who proposed requiring data centers to report energy and water usage levels, although the bill died last week after growing industry opposition, while Colorado lawmakers proposed a bill that would require data center operators to provide their own renewable energy sources to power their centers.
Elsewhere, data centers have created divisions within parties. In Oregon, for example, Democratic Gov. Tina Kotek proposed expanding tax breaks for new data centers, even as members of her party approved a bill temporarily ending those breaks.
The same dynamic is at play in Georgia, where Republicans have been divided over whether to curb data center development. The latest bill introduced by the GOP-led state Senate has been called a “window-dressing” measure by critics. At least 10 municipalities or counties in the state have enacted their own temporary moratoriums on building new data centers. More broadly, about $98 billion in projects were blocked or stalled nationwide over three months last year, according to Data Center Watch, underscoring growing state and local opposition to the facilities.
After the issue played a major role in last year’s gubernatorial elections in Virginia and New Jersey, it is poised to do the same again in 2026, with 36 gubernatorial races on the ballot across the country.
“Everywhere I go I get questions about data centers or AI,” said Georgia Attorney General Chris Carr, who is running in his state’s crowded Republican gubernatorial primary. “AI is here now and we can lead or we can be trampled.” He said he wanted his state to be “in a position to be able to take full advantage of the positive aspects of AI and to be able to put the right barriers around it.”
Experts who monitor AI and data centers point out that it is an issue that relates to several common economic issues, making it an ideal target for politicians of both parties.
“This has become part of a very broad national conversation that encompasses topics such as energy costs and utility rates, environmental concerns and water consumption,” said Miquel Vila, principal analyst at Data Center Watch, a project by artificial intelligence firm 10a Labs that tracks local data center activity. “It’s a cost-benefit discussion: Who benefits? Who pays the cost? Many states are still figuring this out.”
“It’s important to point this out,” he added. “If no one likes them, why are they bringing them in? Well, it’s a stream of tax revenue for areas … where they may not have many other options.”
Experts said legislating the issue at the state level, much less the national level, is complicated for political leaders trying to balance the perceived economic gains that building new centers could bring to certain areas with rising utility rates and other consequences that might be felt by voters.
“It revolves around the issue of affordability, which is a shared priority among both Democrats and Republicans,” said King of the Foundation for American Innovation. “The story being told is that AI-driven demand for data centers is driving up electricity bills. And for many people, this is a pretty compelling reason to take legislative action against data center development.”
